Seventy-five percent of Elkin City Schools’ expenditures are used for instructional support, according to auditors who presented the 2015-16 fiscal year audit report during the Sept. 26 Elkin Board of Education meeting.
Melissa Prevette with Dixon Hughes Goodman auditing firm made the audit presentation during the meeting, showing the board and those attending charts which break down the school system’s revenue streams and how much funding comes from each, and its expenditures and the areas where the funding is spent.
In 2015-16 fiscal year, the bar graph showed that Elkin got $8,023,753 from state funding, with $2,522,543 from general and special revenue streams, and another $585,095 from federal funds.
The expenditure graph showed the percentage of funding used for instructional needs, and then the percent used for non-instructional expenses. In 2015-16 and the year prior, Elkin City Schools used 75.3 percent of its revenue on instructional expenditures.
Interim Superintendent Dr. Don Martin asked Prevette what the average percentage usually is for instructional spending, and she reported typically the audit firm sees instructional spending at 65 to 70 percent. “So this is higher than usual, and you’ve been consistent over the years in the way you’ve spent those dollars,” she added.
The school system ended the 2016 fiscal year with a fund balance of $1,541,109, of which $1,530,291 was available for appropriation. That fund balance total was $392,713 less than the fund balance at the end of the 2015 fiscal year. The initial amount of fund balance appropriated to balance the 2016 budget was $899,000, but that amount wasn’t needed, Prevette explained.
The highest fund balance total was in 2013 when the fiscal year ended with $2,152,169 in the fund, according to the graph Prevette presented.
The auditors found no compliance findings in the federal and state programs it was scheduled to audit this year, Prevette reported, but one internal control that was tested needed a fix. She said that involved there being no board police addressing compensatory time for exempt employees. To correct that lack of internal control, the school board already had on its budget for later in the meeting the consideration of a policy, which it approved unanimously.
During the evening’s discussion items, Jan Zachary, chief financial officer for the school system, presented the final version of the 2016-17 budget for the school board’s consideration and approval.
The new fiscal year budget includes allocating $492,346 to balance the budget, which is less than the originally proposed amount of $594,791.
The reduction in use of fund balance came from seeing increased revenue in sales tax refunds of $6,928; out-of-district tuition of $60,000, which in the past has gone directly to the schools rather than the system-wide budget and of which $40,000 will go back out into funding; refunds on LED light conversion of $10,000; and $14,000 in donations for new timpani drums, which is just a flow-through and comes back out in expenditures. Decreased expenditures to lower that fund balance use includes $32,848 for an elementary school teacher assistant position not filled; $23,844 in technology ink and non-capitalized equipment; $5,000 in worker’s compensation insurance; $6,000 for a 50-percent decrease in board staff development; and $4,725 in sales tax expense to refund 2015-16.
The total local current expense fund appropriation for the year will be $2,721, 498, with state funding at $7,873,979, federal grants at $234,376, child nutrition at $662,396, capital outlay at $694,408.18 and local special revenue of $319,838.
Zachary reported that $12.5 million is the predicted budget, a little less than last year’s budget of $13 million. Part of those decreases can be attributed to less state funding and in-county enrollment coming in a little lower than last year. Also, the school leaders have calculated the budget much closer this year so they wouldn’t have to allocate as much fund balance.
The school board unanimously approved the budget for the 2016-17 fiscal year.
Wendy Byerly Wood may be reached at 336-258-4035 or on Twitter @wendywoodeditor.